It is essential for individuals to be able to see how all the pieces of their financial situation such as; salary, self-employment income, pensions, Social Security, investments, contributions to savings, retirements contributions and accounts, debt service, and living expenses come together at some point in the future when they plan to retire or work less. It is critical for them to see how all of these factors impact the net cash flow and whether they will have enough income to support their desired standard of living throughout their lifetime. If the cash flow is insufficient to meet their needs in future years, it is essential for them to know how much they need to contribute monthly, annually, or in a lump sum today so that they will have the necessary cash flow in retirement.
There are many existing financial planning programs that are designed to provide this type of information. Most of those programs require very detailed information about a client's budget and expenses as well as all aspects of their assets, liabilities, and investments. They often require the client to fill out forms and provide financial information that takes them an hour or more to itemize. They often, also require a financial professional or their staff to input the data into a computer program that takes them an hour or more for input. Because of the time involved, financial professionals often need to charge many hundreds or thousands of dollars for such a plan. The cost and complexity of these programs make it difficult for all individuals or families to have access to this type of information and make it impractical for individuals to input their own data or prepare their own plans. Most of the simpler computer programs designed for use by individuals who are not financial professionals, show one aspect of their financial situation but not a comprehensive overview.
Many of the existing financial planning computer programs produce reports that are very lengthy, often 45 or 50 pages in length or more, with canned paragraphs and verbiage to accommodate various conclusions depending on the data entered and various mathematical results. While the data entered is often detailed, it also often uses line graphs and charts to show total cash flow or total value of assets at different points during the retirement period without showing the detail of the financial pieces that make up that total. Rather than seeing how all of the financial pieces come together on a year by year basis, the report requires the client to trust that the totals represented by the lines are correct. That makes it difficult for the client to know how the totals were derived and, thus, reduces the believability of the totals.
Because of the complexity of many financial planning programs, it is very difficult to easily identify errors in data entry and it is very time consuming to address those errors and print out a corrected report.
This purpose of this invention is to: reduce the input data needed to a minimum required for preparing detailed reports of a client's current financial situation and resulting cash flows throughout their lifetime; reduce the time needed to prepare these detailed reports to sometimes as low as fifteen or twenty minutes; produce a report that shows enough detail of all the pieces of a client's financial positions affecting cash flow on a year by year basis that the client can see how the numbers were derived and have confidence in their accuracy; make it possible to identify and correct data entry errors in a short time, perhaps no more than ten minutes; allow adjustments to assumptions contained in the reports with a few keystrokes; provide clients with the amounts of contributions required monthly, annually, or lump sum to address all future cash flow shortfalls; allow individuals or professionals to prepare and print a final report with any needed adjustments or corrections within a short time, perhaps thirty to forty five minutes; make data entry simple enough for individuals to prepare their own reports; quickly provide financial professionals with a detailed overview of a client's current financial position and retirement needs to allow them to give individuals comprehensive advice or analysis of the client's financial situation within a single meeting, usually no more than one hour in length.